seems Gama Lin May 14, 2015 Lakshmi Kommi Director, Debt Management City of San Diego 202 Street, 7th Floor, San Diego, CA 92101 Dear Ms. Kommi: Barrett Sports Group, LLC (BSG) is pleased to submit this engagement letter to continue to provide consulting services to the City of San Diego (City) and the County of San Diego (County) (collectively, the Governments). analysis may not be used, in Whole or in part, in any ?nancing or marketing document associated with the proposed project. The Terms and Conditions of our current engagement letter dated April 23, 2015 shall remain unchanged. SCOPE OF SERVICES Presented below is a summary of the proposed scope of services to be provided by BSG based on our current understanding of the engagement. We would expect to work closely with you to re?ne our speci?c scope of services (if necessary) to best meet your needs in the most ef?cient and cost effective manner. Phase 1 San Diego Chargers Financial Analysis (Baseline) The objective is to create a baseline stadium operating and ?nancial pro?le for the Chargers (Chargers), including detailed stadium operating revenues and expenses, based on current conditions at Qualcomm Stadium. The ?nancial model will be developed to allow for sensitivity analyses on key variables. The speci?c tasks of this phase are as follows: 1.1 Review historical operating revenues and expenses for the Chargers at Qualcomm Stadium. 1.2 Review and utilize our internal, proprietary database of stadium operating revenues and expenses for comparable franchises. Adjust (as necessary) key performance indicators based on local market conditions. 1.3 Base-d on the historical and comparable ?nancial information obtained in previous tasks, we will develop a ?nancial model to assist you in estimating stadium operating revenues and expenses for the Chargers. 1.4 Estimate major stadium revenue items for the Chargers. Estimated revenues will includ, . Stadium Operating Revenues Eig?ument 0 Gate Receipts Of?ce at the City Clerk San Drape, 1219 Morningside Drive, Suite 101 Manhattan Beach, CA 90266 (310) 802?8775 I (310) 802?8777 iakshmi Kommi May 14, 201 5 Page 2 Concessions Novelties Parking Advertising/ Sponsors Luxury Suite Revenue Club Seat Revenue Miscellaneous 1.5 Estimate stadium operating expenses for the Chargers. Estimated expenses will include: - Stadium Operating Expenses 0 Rent Revenue Sharing Game Day Expenses Annual Expenses Capital Expenses Miscellaneous 00000 1.6 Based on the assumptions developed above, evaluate stadium operating surplus or de?cit, before debt service, generated by the Chargers. Phase 1 Escalate Baseline Assumptions to Year Prior to New Stadium The purpose-of this phase is to adjust and modify assumptions above to re?ect the potential performance of the Chargers in the year before a. new stadium is developed (or Qualcomm Stadium is renovated). The baseline ?nancial model will be adjusted to re?ect escalation of stadium revenues and expenses (as appropriate). Phase 2 a) San Diego Chargers Financial Analvsis (New Stadium Scenario) The objective is to create an operating and ?nancial pro?le for the Chargers, including detailed stadium operating revenues and expenses (see tasks described above in Phase 1 assuming a new, open-air stadium is developed on the existing Qualcomm Stadium site. The ?nancial model will be developed to allow for sensitivity analyses on key variables. Phase 3 Incremental Revenue Analvsis Compare estimated Baseline (current condition) revenues and expenses vs. New Stadium revenues and expenses. Phase 4 ?a Sensitivitv Analysis Perform sensitivity analyses on key variables for the Chargers. The model can be adjusted quicka to allow you to understand the impact of ?uctuations in key assumptions. Summary of Findings BSG will prepare a presentation style report to communicate ?ndings and conclusions. Lakshnii Kommi May 14, 201 5 Page 3 BUSINESS ARRANGEMENTS We will complete the scope of services above for $25,000, plus reimbursement for all direct expenses incurred including travel and subsistence of our staff, word processing, copies, postage, telephone, publications, subcontractors (if any), econometric models and facsimile transmission, Reimbursable expenses shall not exceed the existing $5,000 maximum Without the approval of the Governments. If at any time during our engagement it is determined by you that the engagement should not proceed, we shall halt our activities and present a ?nal invoice for our services provided and expenses incurred to date based on our standard hourly rates. For consulting services such as these, our standard hourly rates are as follows: Personnel Rates Principal Daniel S. Barrett $45 0 Manager Joshua C. Cohen $250 Consultant Brett D. Rasmussen $150 Administrative $50 Additional consulting services not described above (if any) shall be billed at our standard hourly rates, plus reimbursement of expenses. We will invoice each of the City and County separately for one half of any billed. Our statements will be rendered (progress payments) and payment in full Will be due Within thirty (30) days after receipt of each such statement. Amounts not paid within thirty (3 0) days accrue an interest charge of one percent per month. We greatly appreciate the opportunity to be of service and assistance to you in this very exciting project. If you have any questions or comments, please contact me at (310) 802-8775. Sincerely, Barrett Sports Group, LLC BY: (Daniefs. (Barrett Daniel S. Barrett TITLE: Principal DATE: Maw 14, 2015 CONFIRMED AND ACCEPTED: City of 85%) County of San Diego By: war A BY: WW lit. Dennis Gakung? Director Purchasing Contracting Lakshmi Kommi May 14, 2015 Page 4 TITLE: DATE: APPROVED AS TO FORM JAN 1. (3074;1331?1?11 City orney BY: p? xv: - TITLE: DATE: mm TITLE: DATE: County Counsel BY: TITLE: DATE: Lakshmi Kommi May 14, 2015 Page 3 BUSINESS ARRANGEMENTS We will complete the scope of services above for $25,000, plus reimbursement for all direct expenses incurred including travel and subsistence of our staff, word processing, copies, postage, telephone, publications, subcontractors (if any), econometric models and facsimile transmission. Reimbursable expenses shall not exceed the existing $5,000 maximum without the approval of the Governments. If at any time during our engagement it is determined by you that the engagement should not proceed, we shall halt our activities and present a ?nal invoice for our services provided and expenses incurred to date based on our standard hourly rates. For consulting services such as these, our standard hourly rates are as follows: Personnel Rates Principal Daniel S. Barrett $450 Manager Joshua C. Cohen $250 Consultant Brett D. Rasmussen $150 Administrative $50 Additional consulting services not described above (if any) shall be billed at our Standard hourly rates, plus reimbursement of expenses. We will invoice each of the City and County separately for one half of any billed. Our statements will be rendered (progress payments) and payment in ?ill will be due within thirty (30) days after receipt of each such statement. Amounts not paid within thirty (30) days accrue an interest charge of one percent per month. We greatly appreciate the opportunity to be of service and assistance to you in this very exciting project. If you have any questions or comments, please contact me at (310) 802-8775. Sincerely, a Barrett Sperts Group, LLC BY: (Daniel's. Giarrett Daniel S. Barrett TITLE: Principal :1 sat DATE: May 14.. 2015 CONFIRMED AND ACCEPTED: City of San Diego BY: Lakshmi Kommi May 14, 2015 Page 4 TITLE: DATE: APPROVED AS TO FORM JAN I. GOLDSMITH, City Attorney BY: TITLE: DATE: TITLE: [23%ng DATE: 257 County Counsel BY: TITLE: in DATE: :3 w: a?